The Federal Reserve Cuts Interest Rate, Lowering its Benchmark Rate to 4.00-4.25%

The Federal Reserve lowered its benchmark rate to 4.00–4.25% on Wednesday, a quarter-point decrease in interest rates. Following months of pressure from President Trump, the action—the first since December 2024—paves the way for more cuts later this year.
The Fed stated that while the labor market has cooled and economic growth has "moderated," Trump's insistence on lower interest rates to boost the economy was the main driver. Recently appointed to the Fed board, Governor Stephen Miran demanded a larger half-point cut to offer more substantial aid.
The effective rate is anticipated to drop to 3.6% by the end of 2025, according to Fed forecasts, which now include three decreases in 2025—more than originally anticipated.